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Home Cryptocurrency news

Bitcoin Miners Capitulated in Dec 2018 and it Could Signal the End of Bear Market

Tony Spilotro by Tony Spilotro
2 years ago
in Cryptocurrency news, Bitcoin
Reading Time: 3min read
Bitcoin Miners Capitulated in Dec 2018 and it Could Signal the End of Bear Market
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The biggest discussion point around Bitcoin currently, is whether or not the first-ever cryptocurrency has bottomed or not, and if the bear market will soon be ending or if a lot more pain is ahead for crypto investors.

While many crypto traders and analysts are feverishly reviewing price charts and other important indicators searching for a sign, one particular analyst suggests looking at Bitcoin mining difficulty levels and potential capitulation by crypto miners as the signal the bear market has ended.

Bear Market Grand Finale: Break of $6K Caused Miners to Capitulate

Like any good fireworks display, the grand finale is a spectacle worth waiting for. As was the case throughout the crypto bear market, where powerful price swings over the course of 2018 ended with an explosive move below critical support and into the current trading range Bitcoin price is currently in.

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The move below $6K was exceptionally violent due to a large number of stop loss orders being placed directly below the seemingly unbreakable support level. Buyers and bulls felt confident that the price would hold, but prepared for the worst by placing stop orders just below this level.

Related Reading | Peter Brandt Calls For 80%+ Bitcoin Price Decline Over A Year Ago With Chilling Accuracy 

When the worst-case scenario became a reality, the stop orders executed further propelling the price per BTC downward. But it wasn’t just investors, hedge funds, and other bulls that capitulated during the violent move.

Bitcoin miners were also forced to sell off their holdings or risk having the price per BTC fall too low and remove any chance for maintaining profitability. The fallout experienced by Bitcoin miners may have signaled the end of the crypto bear market of 2018 and 2019, according to one crypto analyst.

ICYMI: the biggest #bitcoin sellers, miners, have already capitulated in Nov/Dec 2018. Miners have switched off old mining hardware because of low prices and difficulty has adjusted downwards. In 2011 and 2015 downward difficulty adjustment signaled the end of the bear market .. pic.twitter.com/yOZL26aqYC

— PlanB ? (@100trillionUSD) March 3, 2019

According to Plan B, Bitcoin miners, the “biggest Bitcoin sellers,” have “already capitulated.” He further explains that due to the price being so low compared to the cost of mining a BTC, miners have “switched off old mining hardware” and “difficulty has adjusted downwards.”

Most chartists look to past Bitcoin bubbles to get an idea of how the aftermath of the most recent bubble pop may play out. Rather than look at the MACD, RSI, or other price-related statistics, Plan B’s chart depicts spikes downward in BTC mining difficult adjustments. When comparing the most recent capitulation event against previous bear market bottoms, the downward movement in this key metric could be the signal everyone is looking for that suggests the current bear market bottom is in.

Halving: More Evidence That the Bear Market Tides Are Turning for Bitcoin

Data shows that Bitcoin miners are clearly tied to Bitcoin price in a variety of ways. Not only could miner capitulation signal the bear market has ended, but the block reward miners receive could be the key to unlocking the next bull run.

Another chart shared by Plan B shows in different shades of color the proximity to Bitcoin’s “halving” date. The closer price gets to this halving date, the higher the price per BTC begins to trend upward.

https://twitter.com/100trillionUSD/status/1102122695683133440

According to the chart, the 2011 bear market bottom was at 12 months out from halving, and in 2015 the bottom was 10 months away from halving. When comparing the amount of time in proximity to past bear and bull cycles, Bitcoin may be anywhere from 2- to 4-months away from slowly returning to a bull market.

Related Reading | Poll Reveals Majority of Crypto Investors See Bitcoin Price at $100,000 to Millions Long-Term 

Each halving reduces the BTC reward miners receive for validating each new block. In the coming halving, the 12.5 BTC reward will be cut in half to 6.25 BTC. The lowered Bitcoin supply stream flowing into miner’s wallets helps to reduce sell pressure on the market, and demand eventually takes over supply and the price grows exponentially. When this begins to happen again, FOMO should return to the market in a massive way, potentially taking Bitcoin to $100,000 to “millions” per BTC, investors believe.

Tags: Bear marketbitcoinbitcoin minerscapitulationminersPlan B
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellent. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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